Vimeo stock soars on better-than-expected Q4 revenue forecast

Vimeo (NASDAQ: VMEO) saw its shares surge more than 18% in premarket trading Tuesday after the video platform operator offered above-consensus Q4 revenue and operating income forecast.

Moreover, Vimeo’s Q3 results also beat expectations, with the company reporting earnings per share (EPS) of $0.05, beating analyst expectations of $0.01.

Revenue rose to $104.56 million, also above the consensus projection of $99.48 million.

Adjusted EBITDA rose 26% year-over-year to $16.1 million, topping the expected $8.84 million, while gross margin stood at 79%, slightly below last year’s 80% but exceeding the 77.4% estimated by analysts.

For Q4, Vimeo expects revenue of approximately $100 million, above the $97.1 million estimate.

Furthermore, it anticipates operating income around $2 million, significantly better than the $5.55 million loss forecasted by analysts.

The company also projects its Q4 adjusted EBITDA to be close to $10 million.

Following the report’s release, analysts at Truist Securities lifted their price target on VMEO shares from $7 to $9.

“A low valuation, improving execution, strong balance sheet (BS) and secular growth in video consumption keep us positive on VMEO and make the stock compelling for patient investors, in our view,” analysts led by Youssef Squali said.

Piper Sandler analysts also raised their VMEO price target from $5 to $7.

While noting that the Q3 print “represents further progress&raising 4Q24 is constructive,” Piper analysts said they would “like to see better line of sight to revenue growth before reviewing our thesis.”

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